Gilead's twice-yearly PrEP injection wins FDA approval, analysts see solid launch ahead

The FDA has approved Gilead's lenacapavir (Yeztugo), a twice-yearly injectable PrEP drug, with Jefferies analysts anticipating a strong launch. Priced near $26,000 annually (gross) but potentially $20,000 net due to lower rebating, Yeztugo offers a convenience advantage over existing daily oral PrEP options. Wall Street projects $135-150 million in 2025 revenue, achievable with a small share shift from current PrEP users, and Jefferies maintains a 'Buy' rating on Gilead with a $130 price target, citing potential upside from a successful launch.

Analysis

Gilead Sciences Inc. has secured FDA approval for Yeztugo (lenacapavir), its twice-yearly injectable HIV prevention drug, a development Jefferies analysts characterize as a significant de-risking event and anticipate will lead to a solid launch. The approval, granted under a six-month Priority Review and Breakthrough Therapy Designation, positions Yeztugo as the first PrEP drug requiring only two treatments annually, a key convenience advantage over daily oral options and cabotegravir's six yearly injections. Gilead is expected to price Yeztugo comparably to its existing oral PrEP, Descovy, with a gross annual cost near $26,000, potentially netting around $20,000 due to less aggressive rebating. Wall Street projects 2025 revenues for Yeztugo in the $135 million to $150 million range, which Jefferies views as attainable if approximately 15,000 patients (representing 0.5% to 1% of the current PrEP market) switch from existing therapies. Successful execution, particularly on reimbursement and achieving targeted payer access—75% unrestricted by year-end 2025 and 90% by mid-2026—is critical for uptake acceleration in Q4 2025 and into 2026. Consensus estimates suggest Yeztugo could generate up to $750 million in sales by 2026, implying a modest 1% to 2% market share shift, which Jefferies sees as manageable. Jefferies maintains a 'Buy' rating on Gilead with a $130 price target, implying a 20% upside from the time of writing, contingent on a successful launch meeting or exceeding market expectations, especially noting that biotech stocks with good launches are considered well-positioned in the current volatile market.

Key Decisions for Investors

• Investors should closely monitor Gilead's commercial execution for Yeztugo, specifically focusing on achieving projected payer access milestones of 75% by year-end 2025 and initial patient uptake figures, as these are crucial for validating revenue projections.
• Given the FDA approval and positive analyst outlook with a $130 price target, GILD presents a potential investment opportunity, but realization of this upside depends heavily on successful market penetration of Yeztugo against established PrEP therapies and hitting the $135-150 million revenue target for 2025.
• Consider the launch of Yeztugo as a key catalyst for Gilead's stock performance; a launch that meets or exceeds street expectations for revenue and patient adoption could drive the stock higher, aligning with Jefferies' view on the attractiveness of biotech companies with successful product rollouts.